Half Year Results

Ryanair Holdings PLC 03 November 2003 RYANAIR PROFITS BEAT EXPECTATIONS FOR HALF YEAR ENDED 30 SEPT'03 PROFITS RISE BY 16% to €176M AS AIRLINE REDUCES FARES BY 12% AND INCREASES TRAFFIC BY 45% Ryanair, Europe's No.1 low fares airline today (Monday 3 Nov 2003) released financial results for the half year ended 30th September 2003 showing record profit and traffic growth, whilst passing on fares that are 12% lower than the equivalent period last year. Summary Table of Results (Irish GAAP) - in Euro Half year ended Sept 30,2002 Sept 30, 2003 % Increase Passengers 7.8m 11.3m 45% Revenue €464.6m €596.4m 28% Adjusted Profit after €150.9m €175.5m 16% tax Note 1 Adjusted EPS (Euro 19.99 23.21 16% Cent) Note 1 Note 1: Adjusted profit after tax and EPS, excludes the exceptional costs of €5.4m and a Goodwill charge of €1.2m Traffic for the six months grew by 45% to 11.3m, average fares declined by 12% for the half year. Total revenues rose by 28%, operating costs rose by 32%, whilst after tax margins declined as predicted from 32% to 29% for the half year. Adjusted net profit after tax rose by over 16% to a record €175.5m. Announcing these lowest ever fares and record profits, Ryanair's Chief Executive, Michael O'Leary said; 'These results demonstrate another strong performance from Ryanair's low fares model which continues to grow profitably in adverse market conditions across Europe. The strength of our traffic and profit growth, as well as the exceptional margins, once again proves our doubters wrong. As Southwest Airlines has proven for over 30 years, the low fares model (if properly implemented) works, it delivers extraordinary growth and exceptional profitability in an industry more often characterised by losses. 'During a period impacted by a war in Iraq, high oil prices, and a depressed economic environment in Europe, Ryanair has taken delivery of 18 new Boeing aircraft, acquired, restructured and relaunched Buzz, opened two new bases in Milan Bergamo and Stockholm Skavsta, and launched over 50 new routes. 'Having increased seat capacity this Summer by over 50% and launched so many new routes it was inevitable that load factors would decline - as predicted - from last year's record levels. Most of these new routes have performed extremely well and we are now running slightly ahead of our expectation of a 5% load factor decline for the year. Although yields continue to be softer than we expected we will continue to drive down fares in all markets, whilst offering more choice, better service and lowest ever prices to our customers. 'Of the two new bases this year Milan has, as expected, been the better performer this Summer. Load factors at the Stockholm base have been slightly lower, largely as a result of lower than expected load factors on the three intra-Scandinavian routes (Aarhus, Oslo, and Tampere) and we are in discussions with our partners at Stockholm Skavsta Airport which will see us either bring the performance of these routes up to acceptable load factors or alternatively replace them with new international destinations from Stockholm. Some of our new routes from Stansted this Summer, particularly to the low countries and one or two French destinations have also underperformed. Unless there is a significant improvement in load factors through the Winter, then we will replace a small number of these with alternative destinations and services, by selecting from some of the 50 new airports that we are currently in discussions with. 'At a time when many European airlines are announcing losses or steep falls in profits, Ryanair is continuing to grow profitably. This Winter we will operate 13 new routes as follows: Birmingham-Girona Glasgow-Shannon Birmingham-Murcia London-Baden Baden Bournemouth-Girona London-Reus Frankfurt-Alghero London-Tampere Frankfurt-Venice London-Valladolid Glasgow-Gothenburg Stockholm-Brussels Glasgow-Milan 'We continue to meet and defeat attempts by our high fare flag carrier competitors to limit Ryanair's growth, to block competition and lower fares in regional markets in Europe. In recent weeks an effort by SAS to block our operations at Aarhus has been dismissed; claims by Air Mediterranee that its traffic has declined as a result of Ryanair's low fares services on the London-Pau route have been disproved by official CAA traffic statistics; attempts by Dusseldorf Airport and Lufthansa to block Dusseldorf designation for Niederhein Airport have been defeated and the Norwegian CAA has also thrown out complaints from SAS about Ryanair's cost base at Haugesund. 'We continue to await a final decision of the European Commission on the Charleroi investigation, but remain confident that Commissioner de Palacio will put in place a framework that will encourage and enable publicly owned airports such as Charleroi and Strasbourg to compete on a level playing field with the many privately owned airports around Europe. These publicly owned secondary and regional airports must be allowed and encouraged to participate in the low fares, high growth, traffic and tourism revolution. 'At a time when the high fare flag carriers are entering into anti-consumer alliances around Europe, we believe the Commission is extremely focused on the fact that the development of Europe's regions - and competition in air travel - depends on the growth of direct low fare flights. This is vital when the flag carriers are focusing on adding frequency and increasing prices on connecting flights across a small number of congested hub airports in Europe. The threat to consumers and air travel has recently been demonstrated by Britair/Air France's return to a monopoly service on the Strasbourg-London route with same day return fares that start from a lowest price of almost €800 return from Strasbourg, a fare that is over 40 times more expensive that the lowest fare on sale from Ryanair for a similar itinerary. 'As always our focus in Ryanair continues to be on cost reduction. We are currently finalising negotiations with financial institutions for new and lower cost financing for some of our new 737-800 series deliveries. Going forward it will be Ryanair's policy to own outright a majority of these aircraft, but to lease a significant minority. The next 10 aircraft for delivery in early 2004 will be financed under long-term low cost operating leases which benefit from Ryanair's extremely low purchase price, resulting in highly competitive monthly lease rentals. The financing of a significant portion of Ryanair's new aircraft deliveries in this manner over the coming years will significantly boost Ryanair's cashflow and ensure that the airline continues to maintain a substantial net cash position on its balance sheet, allowing Ryanair to continue to be amongst the best financed airlines in the world. 'We remain dismayed at the continuing inactivity of the Irish Government in implementing its own election program to bring forward competition and low cost efficient facilities at the Irish airports. Costs at the three Irish airports, whilst not a material issue for Ryanair any more, will rise substantially next year. Access costs and fares to Ireland will rise in line with these totally unnecessary price increases at a time when Irish tourism is crying out for new routes and lower access fares. 'It is now over 12 months since the Government received 13 expressions of interest from a wide range of aviation companies to finance and build multiple competing terminals at Dublin Airport and still we have seen no action whatsoever to introduce this desperately needed competition. It is time the Irish Government 'got real' and proceeded with its stated policy of breaking the airport monopoly into three competing companies and expedite the development of competing terminals at Dublin Airport. 'Looking forward for the remainder of the fiscal year, we remain confident that traffic growth will continue to be strong, but cautious about fares and yields. We expect that average yields will continue to decline by between 10% and 15% compared to those charged last year, and remain equally determined that Ryanair will continue to be the lowest fare airline in every market in which we operate. Accordingly we expect profits to grow materially, as we continue to maintain our margins in excess of 20%. The one key difference between Ryanair and all the other low fare imitators here in Europe is that only one airline - Ryanair - offers the lowest fares and has the lowest costs. Ryanair will continue to drive down costs and prices and by so doing, we will continue to replicate the success of other industry price leaders such as Southwest, Dell and Wal-Mart and deliver superior returns for shareholders'. To celebrate these excellent results in traditional Ryanair fashion we are offering one million seats at just £1 each (plus taxes and charges). This offer is available for sale immediately on www.ryanair.com on all routes from London with seats available every day of the week. Booking must end at midnight on Thursday so book early as demand is bound to be very strong for this phenomenal offer. Don't give up the day job - just take a £1 getaway with Ryanair! ENDS. Monday, 3rd November 2003 For results and further information Howard Millar Pauline McAlester please contact: Ryanair Holdings Plc Murray Consultants www.Ryanair.com Tel: 353-1-8121212 Tel: 353-1-4980300 Certain of the information included in this release is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially. It is not reasonably possible to itemise all of the many factors and specific events that could affect the outlook and results of an airline operating in the European economy. Among the factors that are subject to change and could significantly impact Ryanair's expected results are the airline pricing environment, fuel costs, competition from new and existing carriers, market prices for replacement aircraft, costs associated with environmental, safety and security measures, actions of the Irish, U.K., European Union ('EU') and other governments and their respective regulatory agencies, fluctuations in currency exchange rates and interest rates, airport access and charges, labour relations, the economic environment of the airline industry, the general economic environment in Ireland, the UK and Continental Europe, the general willingness of passengers to travel and other economics, social and political factors. Ryanair is Europe's largest low fares airline with 136 low fare routes across 16 countries. Ryanair operates a fleet of 68 aircraft, with firm orders for up to a further 112 new Boeing 737-800's which will be delivered over the next 6 years. Ryanair currently employs a team of 2,200 people and expects to carry almost 24 million scheduled passengers in the current year. Ryanair Holdings plc and Subsidiaries Consolidated Profit and Loss Accounts in accordance with UK and Irish GAAP(unaudited) Quarter Quarter Half Year Half Year ended ended ended ended Sept 30, Sept 30, Sept 30, Sept 30, 2003 2002 2003 2002 €'000 €'000 €'000 €'000 ------- ------- ------- ------- Operating Revenues Scheduled revenues 309,509 238,346 523,540 411,107 Ancillary revenues 41,709 31,981 72,834 53,482 -------- ------- ------- -------- Total operating revenues -continuing operations 351,218 270,327 596,374 464,589 -------- ------- ------- -------- Operating expenses Staff costs 31,576 23,307 61,478 46,732 Depreciation and amortisation 23,682 19,490 46,719 37,863 Aircraft retirement costs 2,718 - 2,718 - Other operating expenses Fuel & Oil 43,688 34,777 84,346 68,422 Maintenance, materials and repairs 11,003 7,694 22,187 17,143 Marketing and distribution costs 2,300 2,622 9,983 8,107 Aircraft rentals 2,214 - 3,720 - Route charges 27,740 17,259 52,889 33,750 Airport and Handling charges 37,562 28,043 72,079 56,206 Other 21,240 14,995 39,686 28,871 -------- ------- ------- -------- Total operating expenses 203,723 148,187 395,805 297,094 -------- ------- ------- -------- Operating profit before exceptional items and goodwill 147,495 122,140 200,569 167,495 Buzz re-organisation costs - - (3,012) - Amortisation of goodwill (587) - (1,171) - -------- ------- ------- -------- (587) - (4,183) - -------- ------- ------- -------- Operating profit after exceptional items and goodwill 146,908 122,140 196,386 167,495 -------- ------- ------- -------- Other income/(expenses) Foreign exchange gains/ (losses) 1,240 1,860 1,433 (721) (Loss) on disposal of fixed assets (8) 1 (8) (21) Interest receivable and similar income 6,057 9,003 12,527 16,005 Interest payable and similar charges (11,727) (7,660) (22,803) (14,054) -------- ------- ------- -------- Total other income/ (expenses) (4,438) 3,204 (8,851) 1,209 -------- ------- ------- -------- Profit before taxation 142,470 125,344 187,535 168,704 Tax on profit on ordinary activities (14,049) (13,362) (18,594) (17,758) -------- ------- ------- -------- Profit for the period 128,421 111,982 168,941 150,946 ======== ======= ======= ======== Earnings per ordinary share -Basic(Euro cent) 16.95 14.83 22.34 19.99 -Diluted(Euro cent) 16.76 14.64 22.09 19.72 Adjusted Earnings per ordinary share* -Basic(Euro cent) 17.39 14.83 23.21 19.99 -Diluted(Euro cent) 17.19 14.64 22.95 19.72 Number of ordinary shares(in 000's) -Basic 757,477 755,031 756,341 755,031 -Diluted 766,342 765,016 764,799 765,377 * Calculated on Profit for period before exceptional items(net of tax) and Goodwill and excluding Aircraft retirement costs Page 1 Ryanair Holdings plc and Subsidiaries Consolidated Balance Sheets in accordance with UK and Irish GAAP(unaudited) Sept 30, March 31, 2003 2003 €'000 €'000 ------- ------- Fixed assets Tangible assets 1,582,842 1,352,361 Aircraft deposits 0 0 Intangible Assets 45,670 - ------- ------- Total fixed assets 1,628,512 1,352,361 ------- ------- Current Assets Cash and liquid resources 1,161,091 1,060,218 Accounts receivable 11,032 14,970 Other assets 18,688 16,370 Inventories 24,153 22,788 ------- ------- Total current assets 1,214,964 1,114,346 ------- ------- Total assets 2,843,476 2,466,707 ======= ======= Current liabilities Accounts payable 64,435 61,604 Accrued expenses and other liabilities 276,551 251,328 Current maturities of long term debt 78,577 63,291 Short term borrowings 1,002 1,316 ------- ------- Total current liabilities 420,565 377,539 ------- ------- Other liabilities Provisions for liabilities and charges 91,246 67,833 Accounts payable due after one year 2,898 5,673 Long term debt 913,243 773,934 ------- ------- Total Other liabilities 1,007,387 847,440 ------- ------- Shareholders' funds - equity Called - up share capital 9,625 9,588 Share premium account 558,330 553,512 Profit and loss account 847,569 678,628 ------- ------- Shareholders' funds - equity 1,415,524 1,241,728 ------- ------- Total liabilities and shareholders' funds 2,843,476 2,466,707 ======= ======= Page 2 Ryanair Holdings plc and Subsidiaries Consolidated Cashflow Statements in accordance with UK and Irish GAAP (unaudited) Ryanair Ryanair Holdings plc Holdings plc Half year Half year ended ended Sept 30, Sept 30, 2003 2002 €'000 €'000 ------- ------- Net cash inflow from operating 253,122 204,908 activities Returns on investments and servicing of finance (7,774) 1,563 Taxation 814 (2,171) Capital expenditure(including aircraft deposits) (283,630) (140,516) Acquisitions and disposals (20,795) - ------- ------- Aircraft deposits 0 0 ------- ------- Net cash (outflow)/inflow before financing and management of liquid resources (58,263) 63,784 Financing 159,450 61,918 (Increase) in liquid resources (141,306) (143,576) ------- ------- (Decrease) in cash (40,119) (17,874) ======= ======= Analysis of movement in liquid resources At beginning of year 982,352 816,023 Increase in period 141,306 143,576 ------- ------- At end of period 1,123,658 959,599 ======= ======= Analysis of movement in cash At beginning of year 76,550 77,747 Net cash (outflow) during period (40,119) (17,874) ------- ------- At end of period 36,431 59,873 ======= ======= Page 3 Ryanair Holdings plc and Subsidiaries Consolidated Statement of Changes in Shareholders' Funds - Equity in accordance with UK and Irish GAAP (unaudited) Share Profit Ordinary premium and loss shares account account Total €'000 €'000 €'000 €'000 ------- ------- ------- ------- Balance at April 1, 2003 9,588 553,512 678,628 1,241,728 Prior year adjustment 0 0 0 0 Issue of ordinary equity shares 37 4,818 - 4,855 Profit for the period - - 168,941 168,941 -------- ------- ------ ------- Balance at September 30, 2003 9,625 558,330 847,569 1,415,524 ======== ======= ======= ======= Reconciliation of adjusted Earning per share (unaudited) Quarter Quarter Half Year Half Year ended ended ended ended Sept, 30 Sept, 30 Sept, 30 Sept, 30 2003 2002 2003 2002 €'000 €'000 €'000 €'000 ------- ------- ------- ------- Profit for the period under UK and Irish GAAP 128,421 111,982 168,941 150,946 Adjustments ------------- Aircraft retirement costs 2,718 - 2,718 - Buzz re-organisation costs - - 3,012 - Amortisation of goodwill 587 - 1,171 - Taxation adjustment for above - - (305) - -------- ------- ------- ------- Adjusted Profit under UK and Irish GAAP 131,726 111,982 175,537 150,946 ======== ======= ======= ======= Number of ordinary shares(in 000's) -Basic 757,477 755,031 756,341 755,031 -Diluted 766,342 765,016 764,799 765,377 Adjusted Earnings per ordinary share -Basic 17.39 14.83 23.21 19.99 -Diluted 17.19 14.64 22.95 19.72 Page 4 Ryanair Holdings plc and Subsidiaries Consolidated Profit and Loss Accounts in accordance with US GAAP (unaudited) Quarter Quarter Half Year Half Year ended ended ended ended Sept 30, Sept 30, Sept 30, Sept 30, 2003 2002 2003 2002 €'000 €'000 €'000 €'000 Operating Revenues Scheduled revenues 309,509 238,346 523,540 411,107 Ancillary revenues 41,709 31,981 72,834 53,482 -------- ------- ------- -------- Total operating revenues -continuing operations 351,218 270,327 596,374 464,589 -------- ------- ------- -------- Operating expenses Staff costs 31,376 23,036 61,058 46,222 Depreciation and amortisation 23,682 19,490 46,719 37,863 Aircraft retirement costs 2,718 - 2,718 - Other operating expenses Fuel & Oil 43,688 34,777 84,346 68,422 Maintenance, materials and repairs 11,003 7,694 22,187 17,143 Marketing and distribution costs 2,300 2,622 9,983 8,107 Aircraft rentals 2,214 - 3,720 - Route charges 27,740 17,259 52,889 33,750 Airport and Handling charges 37,562 28,043 72,079 56,206 Other 21,218 14,973 39,642 28,827 -------- ------- ------- -------- Total operating expenses 203,501 147,894 395,341 296,540 -------- ------- ------- -------- Operating profit before Buzz reorganisation costs 147,717 122,433 201,033 168,049 Buzz re-organisation costs - - (3,012) - -------- ------- ------- -------- Operating profit after Buzz reorganisation costs 147,717 122,433 198,021 168,049 -------- ------- ------- -------- Other income/(expenses) Foreign exchange gains/ (losses) 1,240 (2,329) 1,433 (4,910) (Loss) on disposal of fixed assets (8) 1 (8) (21) Interest receivable and similar income 6,057 9,003 12,527 16,005 Interest payable and similar charges (9,859) (6,527) (19,112) (11,914) -------- ------- ------- -------- Total other income/ (expenses) (2,570) 148 (5,160) (840) -------- ------- ------- -------- Profit on ordinary activities before taxation 145,147 122,581 192,861 167,209 Tax on profit on ordinary activities (14,308) (12,685) (19,108) (17,222) -------- ------- ------- -------- Net Income 130,839 109,896 173,753 149,987 ======== ======= ======= ======== Net Income per ADS -Basic(Euro cent) 86.36 72.78 114.86 99.33 -Diluted (Euro cent) 85.37 71.83 113.59 97.98 Adjusted Net Income per ADS * -Basic(Euro cent) 88.16 72.78 118.45 99.33 -Diluted (Euro cent) 87.14 71.83 117.14 97.98 Weighted Average number of shares -Basic 757,477 755,031 756,341 755,031 -Diluted 766,342 765,016 764,799 765,377 (1)The U.S. GAAP Net income is after marking to market forward contracts.The principal component of the notional loss is in relation to Stg:Euro contracts which were entered into by the Company to protect surplus sterling receipts. Under Irish/UK GAAP such notional gains/(losses) are not taken to the profit/ (loss) account. * Calculated on Net Income before Buzz reorganisation costs (net of tax), and Aircraft retirement costs Page 5 Ryanair Holdings plc and Subsidiaries Summary of significant differences between UK, Irish and US generally Accepted accounting principles(unaudited) Note 1 -Restatement of Comparative Results Under UK and Irish GAAP the Company changed the way in which it accounted for airframe and engine maintenance checks to comply with the provisions of FRS 12 'Provisions, Contingent Liabilities and Contingent Assets' and FRS 15 'Tangible Assets'. Maintenance is no longer provided for by accruing for the future costs of checks but is capitalised as incurred and amortised. An element of the cost of a newly acquired aircraft is also attributed to the condition of its airframe and engines and amortised over the periods which benefit. Under UK and Irish GAAP prior periods are restated for changes in accounting policies. However under US GAAP, a change in accounting policy results in a cumulative adjustment to income in the year of change. Prior year results are not restated Generally accepted accounting principles in Ireland and the United Kingdom vary in certain significant respects from generally accepted accounting principles in the United States as described in Note 29 to our consolidated financial statements included in our 1999 Annual Report on Form 20-F. (A) Net income under US GAAP <----Quarter ended----> <----Half Year ended---> Sept 30, Sept 30, Sept 30, Sept 30, 2003 2002 2003 2002 €000 €000 €'000 €'000 ------- ------- ------- ------- Profit as reported in the consolidated profit and Loss accounts in accordance with UK and Irish GAAP 128,421 111,982 168,941 150,946 Adjustments Pension 200 155 420 277 Derivative financial instruments(net of tax) - (4,189) - (4,189) Amortisation of goodwill 587 - 1,171 - Employment grants - 116 - 233 Capitalised interest re aircraft acquisition programme 1,868 1,133 3,691 2,140 Darley Investments Limited 22 22 44 44 Taxation- effect of above adjustments (259) 677 (514) 536 ------- ------- ------- ------- Net income under US GAAP 130,839 109,896 173,753 149,987 ======= ======= ======= ======= Cumulative effect of accounting change (net of tax) 0 0 0 0 ------- ------- ------- ------- 130,839 109,896 173,753 149,987 Page 6 Note: - under US GAAP changes in accounting policies are only reflected in the quarter in which the change occurrs, accordingly the effect of changes to maintenance, depreciation and tax will only be reflected in Quarter 4 1998 and subsequent periods. See Page 5 for impact on 1998 comparatives. Ryanair Holdings plc and Subsidiaries Summary of significant differences between UK, Irish and US generally accepted accounting principles continued (B) Consolidated Cashflow Statements in accordance With US GAAP <----Half Year ended---> Sept 30, Sept 30, 2003 2002 €'000 €'000 ------- ------- Cash inflow from operating activities 246,162 204,300 Cash (outflow) from investing activities (568,793) (130,741) Cash inflow from financial activities 159,136 67,145 ------- ------- (Decrease)/increase in cash and cash equivalents (163,495) 140,704 Cash and cash equivalents at beginning of year 537,476 482,492 ------- ------- Cash and cash equivalents at end of period 373,981 623,196 ======= ======= Cash and cash equivalents under US GAAP 373,981 623,196 Restricted cash 198,300 - Deposits with a maturity of between three and six months 588,810 407,008 ------- ------- Cash and liquid resources under UK and Irish GAAP 1,161,091 1,030,204 ======= ======= Page 6 Ryanair Holdings plc and Subsidiaries Summary of significant differences between UK, Irish and US generally Accepted accounting principles(unaudited) (C) Shareholders' funds - equity Sept 30, Sept 30, 2003 2002 €'000 €'000 ------- ------- Shareholders' equity as reported in the consolidated balance Sheets (UK and Irish GAAP) 1,415,524 1,153,220 Adjustments: Pension 3,531 2,691 Employment grants - (236) Goodwill 1,171 - Capitalised interest re aircraft acquisition programme 13,980 7,167 Darley Investments Limited (195) (283) Investments - - Minimum pension liability (net of tax) (2,656) - Derivative financial instruments(net of tax) (70,013) (47,786) Tax effect of adjustments (2,189) (1,224) ------- ------- Cumulative effect of change in accounting policies 0 0 ------- ------- Shareholders' equity as adjusted to accord with US GAAP 1,359,153 1,113,549 ======= ======= Opening shareholders' equity under US GAAP 1,177,187 1,019,607 Comprehensive Income adjustments Investments - - Unrealised Pension deficit(net of tax) - - Unrealised gains/(losses) on derivative financial instruments(net of tax) 3,358 (56,045) ------- ------- 3,358 (56,045) Net income in accordance with US GAAP 173,753 149,987 Stock issued for cash 4,855 - ------- ------- Closing shareholders' equity under US GAAP 1,359,153 1,113,549 ======= ======= Page 7 Ryanair Holdings plc Management Discussion and Analysis of Results Introduction Profit after tax increased by 12% to €168.9m including the exceptional costs and goodwill arising from the 'Buzz' acquisition. This profit also includes an additional depreciation charge of €2.7m relating to an adjustment to the residual value of 5 Boeing 737-200 aircraft that were retired earlier than planned (see Note 4). Adjusted profit after tax (excluding Buzz exceptional costs of €2.7m(net of tax), goodwill of €1.2m and aircraft depreciation of €2.7m) increased by 16% to €175.5m. For the purposes of the MD&A the discussion below is by reference to the adjusted profit and loss account excluding the exceptional items referred to above. Summary - Half Year ended September 30, 2003 Profit after tax has increased by 16% to €175.5m, compared to €150.9m in the previous half year ended September 30, 2002 driven by continued strong growth in passenger volumes and tight cost control partly offset by lower average fares. Operating margins have decreased by 2 points to 34%. As a result of these factors operating profit increased by €35.8m to €203.3m compared to half year ended September 30, 2002. Total operating revenues increased by 28% to €596.4m whilst passengers numbers increased by 45% to 11.3m. Scheduled Passenger revenues increased by 27% to €523.5m due to strong passenger volume growth, offset by a 12% decline in average fares during the period. Ancillary revenue increased by 36% to €72.8m, which is less than the growth in passenger volumes and reflects strong growth in non-flight scheduled revenue, car hire and hotel revenue offset by the cessation of the charter programme as Ryanair replaced charter capacity with scheduled services. Excluding charter income ancillary revenue grew by 62%, a significantly faster rate than the growth in passenger volumes. Total operating expenses increased by 32% to €393.1m due to the increased costs associated with the higher level of activity, primarily staff costs, fuel, route charges, depreciation and airport & handing costs associated with the growth of the airline. Operating costs continue to reflect the increased operational efficiencies arising from the higher proportion of 737-800 aircraft operated. Other income/expenses declined significantly by €10.1m due to lower deposit interest rates and higher interest payable charges arising from the increased level of debt. Net margins as a result of the above declined from 32% to 29% whilst net profit increased by 16% to €175.5m. Adjusted earnings per share has increased by 16% to 23.21 euro cent, which is in line with the growth in adjusted Net Profit. Balance Sheet Cash and liquid resources have increased by €100.9m from 1,060.2m at March 31, 2003 to €1,161.1m at September 30, 2003, reflecting the increased cash flows from the profitable trading performance during the period. Eight additional aircraft were delivered in the period and these, in addition to aircraft deposits, accounted for the bulk of the €283.6m incurred in capital expenditure. This was part funded by the draw down of long term debt, which increased, net of repayments, by €154.6m during the period. Shareholders' funds at September 30, 2003 have increased to €1,415.5m, compared to €1,241.7m at March 31, 2003. Detailed Discussion and Analysis - Half Year ended September 30, 2003 Profit after tax has increased by 16% to €175.5m driven by strong growth in passenger volumes at lower average fares and continued tight cost control. Operating margins declined 2 points to 34% whilst net margins declined by 3 points to 29% compared to the previous period. Total operating revenues increased by 28% to €596.4m whilst passenger volumes increased by 45% to 11.3m. Scheduled passenger revenues increased by 27% to €523.5m primarily due to increased passenger numbers on new and existing routes, offset by a 12% decline in average fares. The decline in average fares is due to the launch of new routes and new bases, the weakness of sterling to the euro (which accounted for 6% of the decline), and Ryanair's policy of reducing airfares. Ancillary revenues increased by 36% to €72.8m, which is lower than the growth in passenger volumes, and reflects the cessation of the charter programme as Ryanair replaced Charter capacity with scheduled services. Excluding charters ancillary revenues increased by 62% due mainly to strong car hire revenues, non-flight scheduled revenues, other ancillary product revenues. Total operating expenses increased by 32% to €393.1m due to the increased level of activity, and the increased costs primarily staff, depreciation, fuel, route charges and airport & handling costs associated with the growth of the airline. Staff costs have increased by 32% to €61.5m. This increase reflects a 34% increase in average employee numbers to 2,232, and the impact of a 3% pay increase granted during the period offset by savings arising from the strength of the euro exchange rate to sterling. Depreciation and amortisation increased by 23% to €46.7m(excluding additional depreciation charges on retired aircraft) due to an increase in the average number of aircraft owned from 43 to 58 and the amortisation of capitalised maintenance costs, offset by savings due to the increase in the number of aircraft fully depreciated. Fuel costs increased by 23% to €84.3m due to a 57% increase in the number of hours flown, offset by a decrease in the average US$ cost per gallon, an improvement in the fuel burn rate due to a higher proportion of 737-800 aircraft operated, and the positive impact of the strengthening of the euro to the US$. Maintenance costs increased by 29% to €22.2m reflecting an increase in the size of the fleet operated, higher maintenance due to the acquisition of the 'Buzz' aircraft and an increase in the number of flight hours, offset by savings due to improved reliability arising from the higher proportion of 737-800 aircraft as a percentage of the total fleet. Marketing and distribution costs increased by 23% to €10.0m due to a higher spend on the launch of new routes, and the additional costs associated with the launch of two new bases at Milan-Bergamo and Stockholm-Skavsta. Aircraft rental costs of €3.7m arose during the period reflecting the lease rental costs associated with the acquired 'Buzz' aircraft. Route charges increased by 57% to €52.9m due to an increase in the number of sectors flown, an increase in the average sector length and an increase in the size of the aircraft operated which incur a higher charge, offset by the impact of a weaker sterling to euro exchange rate. Airport and handling charges increased by 28% to €72.1m due to an increase in the number of passengers flown, the impact of increased airport and handling charges on some existing routes, offset by lower charges on our new European routes and at our new bases. Other expenses increased by 37% to €39.7m, which is less than the growth in ancillary revenues (excluding charters) due to improved margins on some new and existing products, and cost reductions achieved on other indirect costs. Operating margins have declined by 2 points to 34% for the reasons outlined above whilst operating profits increased by 21% to €203.3m during the period. Interest receivable decreased by €3.5m to €12.5m reflecting the strong growth in cash resources arising from the profitable trading performance offset by lower deposit interest rates in the period. Interest payable increased by €8.7m to €22.8m due to the increased level of debt arising from the acquisition of new aircraft. Taxation has increased by 6% during the period, less than the growth in pre-tax profits and primarily reflects the continued decline in the headline rate of corporation tax in Ireland. The Company's balance sheet continues to benefit from the strong growth in profits. Tangible fixed assets increased to €1,582.8m from €1,352.4m principally as a result of the delivery of eight additional aircraft since March 31, 2003 and the payment of deposits for new deliveries. The Company generated cash from operating activities of €253.1m, which funded advance payments on future deliveries of €95.1m whilst the balance is reflected in the higher cash and liquid resources figure of €1,161.1m. Advance delivery deposits amounted to €354.5m at the period end. Total debt has increased by a further €154.6m, net of repayments, since March 31, 2003 to €991.8m. Shareholder's funds at September 30, 2003 have increased to €1,415.5m compared to €1,241.7m at March 31, 2003. Detailed Discussion and Analysis - Quarter Ended September 30, 2003 Profit after tax has increased by 18% to €131.7m driven by strong growth in passenger volumes and continued tight cost control, offset by lower average fares. Operating margins have declined by 2 points to 43% compared to the previous period. Operating profit increased by 23% to €150.2m compared to the quarter ended September 30, 2002 whilst profit before tax increased by 16%. Total operating revenues increased by 30% to €351.2m whilst passenger volumes increased by 44% to 6.2m. Scheduled passenger revenues increased by 30% to €309.5m, reflecting the increase in passenger volumes offset by lower average fares of 10%. The strengthening of the euro to sterling accounted for half of this decline. Ancillary revenues increased by 30% to €41.7m, which, excluding charters has increased by 57%. This is higher than the growth in passenger volumes, and reflects strong growth in all areas of ancillary revenues particularly car hire, non-flight scheduled revenues, hotels and internet related activities. Total operating expenses increased by 36% to €201.0m due to the increased level of activity, and the increased costs, primarily staff, depreciation, fuel, route charges and airport & handling costs associated with the growth of the airline. Staff costs have increased by 35% to €31.6m reflecting a 36% increase in average employee numbers to 2,284 and the impact of a 3% pay increase granted during the period offset by savings arising from the stronger euro to sterling exchange rate. Depreciation and amortisation increased by 22% to €23.7m due to an increase in the average number of aircraft owned from 44 to 58, offset by savings arising from the increase in the number of fully depreciated aircraft and the lower euro denominated cost of new aircraft due to the strengthening of the euro to US$ exchange rate. Fuel costs increased by 26% to €43.7m due to a 57% increase in the number of hours flown, offset by a lower US$ cost per gallon of fuel, a stronger euro to US$ exchange rate and an improvement in the fleet fuel burn rate due to a higher proportion of 737-800 aircraft operated. Maintenance costs increased by 43% to €11.0m reflecting an increase in the size of the fleet operated, an increase in the number of flight hours, and higher maintenance charges relating to the 'Buzz' aircraft, offset by maintenance savings arising from the increase in the number of 737-800 aircraft operated. Marketing and distribution costs decreased by 12% to €2.3m due to a lower spend in the quarter on new routes as all new routes were launched in Quarter 1. Aircraft rental costs of €2.2m arose during the period reflecting the lease rental costs associated with the acquired 'Buzz' aircraft. Route Charges increased by 61% to €27.7m due to an increase in the number of sectors flown, an increase in the average sector length and an increase in the size of the aircraft operated which incur a higher charge offset by the impact of a weaker sterling to euro exchange rate. Airport and handling charges increased by 34% to €37.6m, which is less than the growth in passenger volumes and reflects the lower charges on our new European routes and at our new bases. Other expenses increased by 42% to €21.2m, is less than the growth in ancillary revenues after adjusting for the discontinued Charter programme, reflecting improved margins on some new and existing products and continued cost control on other indirect costs. Operating profits have increased by 23% to €150.2m due to the reasons outlined above. Interest receivable decreased by €2.9m to €6.1m reflecting the strong growth in cash resources arising from the profitable trading performance offset by lower deposit interest rates during the quarter. Interest payable increased by €4.1m to €11.7m due to the increased level of debt arising from the acquisition of new aircraft. Taxation increased 5% to €14.0m, which is less than the growth in profits primarily due to the continued decline in the headline rate of corporation tax in Ireland. Notes to the Financial Statements 1. Accounting Policies The accounting policies followed in the preparation of these consolidated financial statements for the half year ended September 30, 2003 are consistent with those set out in the Annual Report for the year ended March 31, 2003. 2. Approval of the Financial Statements The Audit Committee approved the consolidated financial statements for the Quarter and Half Year ended September 30, 2003 on October 30, 2003. 3. Generally Accepted Accounting Policies The Management Discussion and Analysis of Results for the Quarter and Half Year ended September 30, 2003 are based on the results reported under Irish and UK GAAP. 4. Aircraft retirement costs Five aircraft were retired earlier than expected due to the detection in this Quarter of scratch marks ('scribing') that occurred during an aircraft painting programme on these aircraft in 1995. It has been determined that the cost of repairing these aircraft is uneconomic due to the short remaining life of the aircraft. Accordingly the Company has determined that the residual value of US$1m(€794k) for these aircraft is excessive and as a result have reduced it to €250k per aircraft. The cost of this adjustment charge has been reflected in the results for Quarter 2. Independent review report by KPMG to Ryanair Holdings plc Introduction We have been instructed by the company to review the financial information set out on pages 1 to 7 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Irish Stock Exchange which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where they are to be changed in the next annual accounts in which case any changes, and the reasons for them, are to be disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/ 4: Review of interim financial information issued by the Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2003 KPMG Chartered Accountants 30 October 2003 This information is provided by RNS The company news service from the London Stock Exchange

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